COMPANY NEWS;ATARI AGREES TO MERGE WITH DISK-DRIVE MAKER

The Atari Corporation and the closely held JTS Corporation agreed yesterday to merge in a stock swap worth about $75 million. Atari, a pioneer in the home video game industry, plans to issue 40 million shares to JTS, in a bid to expand into disk-drive manufacturing. Based on Atari's closing stock price of $1.875 on Monday, the transaction would be worth about $75 million. The merged company, to be called the JTS Corporation, would continue to develop the Atari video game console and software and sell specialty disk drives. Shareholders of Atari would own 60 percent of the new company, but it would be led by JTS executives. Shares of Atari rose 18.75 cents, to $2.06, on the American Stock Exchange.